Apple ‘map-gate’ gives Google an edge

But the mobile battle is far from over for tech titans

SAN FRANCISCO (MarketWatch) — Apple Inc.’s decision to make Google Inc.’s map app available for the iPhone strengthens the search giant’s already dominant position in the mobile market.

For one thing, Apple’s
AAPL, -1.54%
reversal in the wake of what one analyst dubbed ‘map-gate’ gives Google
GOOG, -0.73%
an edge in the search for ways to make money from mapping and location features on smart phones and tablets.

Still, analysts agree that the fight over who has the better map app is bound to continue as location and navigation become critical in the battle for dominance in the mobile market.

New Google Maps app for iPhone

(3:07)

Three months after the Google Maps mobile app was kicked off the iPhone in favor of Apple's much-criticized mapping software, Google has released a downloadable version of the app through Apple's app store.

“From Google’s end, it’s a big win,” Piper Jaffray analyst Gene Munster told MarketWatch, even as he also noted that Apple’s map-gate has not stalled the momentum of the iPhone 5.

Apple made Google Maps available on its apps store late Wednesday, three months after replacing it with its own application. That move had turned into a public-relations nightmare as users complained about how bad the Apple app was, prompting a public apology from Chief Executive Tim Cook.

But IDC analyst John Jackson noted that despite Cook’s mea culpa, “You can absolute bet that this is not an admission of defeat.”

“This is not Apple abandoning this space,” he told MarketWatch. “This is Apple coming out too soon. You have to assume they’ve gone back to the drawing board. [...] Apple has to be in this space with a robust set of assets to compete effectively.”

Carolina Milanesi of Gartner said that by allowing Google Maps back into its apps store, Apple may be able to “retain those few users who might have thought about moving to Android,” Google’s rival operating system.

But “it does not take any pressure off to fixing maps as fast as they can,” she added. That’s because of the long-term stakes involved in having an effective mapping and navigation application.

Munster of Piper Jaffray noted that Google Maps currently accounts for “sub 1%” of the company’s total revenue. “Maps are insignificant today in terms of revenue,” he said.

Businesses and advertisers are already using location and mapping apps for promotional ads. Jackson of IDC said there will be other “futuristic instances” in which businesses and advertisers can find ways to use consumer data to try to generate sales, essentially by knowing “what they bought and where you are standing.”

Google may have an edge in this battle, in the wake of the Apple map-gate and given its strong position in mobile computing.

Google’s Android operating system is on track to remain the No. 1 mobile operating system in the world this year with 68.3% total market share, according to IDC. Apple’s iOS is No. 2 with 18.8%, while Research In Motion’s
US:RIMM
BlackBerry OS is at No. 3 with 4.7%.

However, it’s a changing market. IDC projects Android’s market share to slip to 63.8% in 2016, while Apple is expected to edge up a fraction to keep the No. 2 position with 19.1%, while Microsoft Corp.’s
MSFT, -0.74%
Windows Phone is seen surging to No. 3 with 11.4%.

Piper Jaffray’s Munster believes Apple clearly has momentum. In fact, a Piper Jaffray survey released Thursday showed strong demand for the new iPhone. “The majority of U.S. consumers want an iPhone 5 even following the launch craze and despite the Maps issues that have been widely noted,” he said.

“After map-gate, it’s really easy to get negative on maps, but at the end of the day the iPhone is more than just maps,” Munster also said.

Besides, Google Maps has lost its prominent position on the iPhone where it’s no longer a default application. Roger Kay of Endpoint Technologies Associates noted that Google Maps “has not be reinstated in the pole position.” “Google Maps is now available, but only as a vanilla app,” he told MarketWatch.

Jackson of IDC said this is not a clear-cut victory for Google.

“I would argue that it’s still a significant challenge for Google that they won’t be back in the iOS environment natively,” he said.

“They’ve been relegated to app status,” he added. “It’s safe to say Apple intends to occupy that space with a quality offering. And they have the wherewithal to get there.”

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